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Corn+Soybean Digest

New For 2002

Although most major components of the Agricultural Risk Protection Act of 2000 (ARPA) were implemented for the 2001 crop year, the act is relatively new. So it's unlikely that major revisions will be made soon via the Farm Bill or ag appropriations, says Tim Witt, Risk Management Agency (RMA) deputy administrator.

“Some changes are still working through the rule-making process and the Board-of-Directors consideration. We would prefer some program stability at this point in time,” he says.

However, several crop-insurance-related issues will receive attention in 2002:

Farm Bill — The Farm Bill is the wildcard where crop insurance is concerned. But it appears a proposal by Sen. Richard Lugar, the top Republican on the Senate Ag Committee, is the only one that could significantly affect current programs.

The proposal places greater emphasis on alternative usage of various risk management strategies. It calls for replacing federal payments to growers with new federal aid to help farmers and ranchers buy more insurance or other price protection sources in tough economic times.

Cost of production insurance — As this issue of Soybean Digest goes to print, it appears a proposal to offer producers “cost-of-production” federal crop insurance will not be available for the 2002 crop season. Cost-of-production insurance would allow producers of program and specialty crops to insure 70-90% of their actual documented costs of production and land, according to the Coalition of American Agricultural Producers (CAAP). CAAP is a non-profit organization that is getting this program off the ground. For a link to more information about this insurance concept, visit

E-filing — By early 2002, all companies that sell MPCI (federally subsidized and reinsured product) are required to be able to market and service federal crop insurance programs over the Internet. One goal of the Freedom to E-File Act is to allow ag producers to obtain forms and other information concerning the crop insurance program over the Internet from approved insurance providers. Witt says the electronic filing program is still in its infancy, but “it's probably used more for administration of the policy than for actual sales.”

E-filing can be used to fill out forms that can then be uploaded to RMA, where they are validated. “Because information is only entered once, it should result in increased efficiencies” with fewer errors, he notes.

Subsidies — According to Witt, all crop insurance subsidies will remain unchanged in 2002. The table above shows the subsidy percentages that apply to the total premium for major crops this season.

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